Patent Office introduces new ground of opposition: software patent found invalid for lack of manne

Myall Australia Pty Ltd and RPL Central Pty Ltd [2011] APO 48

In the second of our two reports on software patent decisions, the Australian Patent Office (APO) has intervened in a patent opposition by requesting that the parties consider whether the invention related to patentable subject matter (i.e., was a “manner of manufacture”), and then finding that it did not. This finding was determinative, as the other ground of opposition was not made out. The decision is another attack on broad computer-implemented method and system claims and has been appealed.

Facts of the case

The patentee, RPL Central Pty Ltd (“RPL Central”), is an Australian company that assists its customers in determining whether their existing skills and experience can be used to acquire recognised qualifications, e.g., from a registered training organisation (RTO) or a Technical and Further Education (TAFE) institution. The process is referred to as Recognition of Prior Learning (RPL).

RPL Central applied for an Australian Innovation Patent (“the Innovation Patent”) in June 2009 for an invention relating to their business: gathering evidence relevant to an assessment of an individual’s competency relative to recognised qualification standards.

The Innovation Patent was examined and subsequently certified in October 2009.

The Innovation Patent as certified had five claims, including an independent method claim and an independent system claim. The system claim specified standard computing and communications technology for performing the method.

The independent method claim in the certified Innovation Patent was as follows:

1. A method of gathering evidence relevant to an assessment of an individual’s competency relative to a recognised qualification standard, including the steps of:

a computer retrieving via the internet from a remotely-located server a plurality of assessable criteria associated with the recognised qualification standard, said criteria including one or more elements of competency, each of which is associated with one or more performance criteria;

the computer processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard;

an assessment server presenting the automatically-generated questions via the internet to a computer of an individual requiring assessment; and

receiving from the individual via said individual’s computer a series of responses to the automatically-generated questions, the responses including evidence of the individual’s skills, knowledge and/or experience in relation to each of the elements of competency and performance criteria, wherein at least one said response includes the individual specifying one or more files stored on the individual’s computer, which are transferred to the assessment server.

The Innovation Patent was opposed in March 2011 by Myall Australia Pty Ltd. Myall is also an Australian company who, trading as Jigsaw Publications, provide RPL services for students and registered training organisations.

Initially, the only ground of opposition was that of novelty, i.e., that the invention was published or used in Australia before the priority date of the claims. However, the Patent Office Delegate (Dr. S. K. Aggarwal) advised the parties that he wished to hear submissions in respect of a ground of lack of manner of manufacture. This ground had not been suggested by Myall, nor had it been raised during examination.

The decision

In considering the ground of lack of novelty, the Delegate applied the traditional tests, and found at least one feature in the certified claims that was not in the prior art disclosures. Accordingly, the claims were found to be novel, and the opposition failed on this ground.

In considering the ground of lack of a manner of manufacture, the Delegate considered recent court decisions involving business method and software patents, including Welcome Real-Time SA v Catuity Inc [2001] FCA 445 and Grant v Commissioner of Patents [2006] FCAFC 120. In Catuity a method of tracking customer behaviour with a smart card was found to be patent eligible, whereas in Grant a method of asset protection including steps of ownership transfer was not.

The Delegate summarised the manner of manufacture requirements post-Grant as follows:

“It is clear from the above decisions that for an invention to be a manner of manufacture, it must give rise to an artificially created state of affairs in the sense of a concrete, tangible, physical or observable effect. Particularly, what is required is a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation.”

The Delegate then considered a string of recent Patent Office decisions, starting with Inventions Pathways Pty Ltd [2010] APO 10 in July 2010, that have found inventions relating to business methods and software to lack a manner of manufacture. This string of decisions includes Iowa Lottery [2010] APO 25, and Research Affiliates, LLC [2010] APO 31.

These Patent Office decisions have relied on Grant to reject claims that only relate to abstract steps, but go further by discounting any computer technology—which would normally force a claim to be “concrete”—as not being “central to the purpose or operation of the claimed process or otherwise arising from the combination of steps of the method in a substantial way”. For example, the claim in Invention Pathways was found to be insufficiently “concrete” because it required only arrangement, gathering, storage and display of information by the computer.

RPL Central argued that their invention was distinguished from the inventions in Grant, Invention Pathways, Iowa Lottery and Research Affiliates because these had “merely [related] to legal, financial or commercialisation advice, schemes, or arguments”, whereas “the claims of the opposed patent define a concrete application of information processing: retrieval of information from one source; processing of that information into an alternative form in which it is suitable for presentation to an RPL candidate; provision of [an] online interface for presentation of the information to a user; and collection, transfer and storage of relevant information provided by the user.”

This argument attempted to show, by reference to “concrete […] information processing”, that the certified claims fulfilled the manner of manufacture requirements post-Grant. The Delegate held, however, that the information processing in the claimed invention was insufficiently “substantial”. In this, he relied on Invention Pathways, in which the Deputy Commissioner of Patents had stated:

In applying the decision in Grant I therefore consider that the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way. Consequently while the step of building a house involves a concrete physical effect it is peripheral to the method of acquiring a house and indeed could hardly be said to characterise the subject matter of the method such that it is considered an artificially created state of affairs. I consider the same to apply to a business scheme implemented in some part by computer and do not believe the patentability of such a method can arise solely from the fact that, in a general sense, it is implemented in or with the assistance of a computer or utilises some part a computer or other physical device in a incidental way.

The Delegate held that the retrieval, storage, and processing of information in the claimed invention “appeared to have no physical effect other than that [which] would arise in a computer with standard software and a conventional use”. The Delegate stated “while the internet and the computer facilitate the operation of the claimed method by retrieving, generating and conveying information, they are not essential to the purpose of the claimed invention”.

In particular, referring to claim 1, the Delegate decided that the step of “processing the plurality of assessable criteria to generate automatically a corresponding plurality of questions relating to the competency of an individual to satisfy each of the elements of competency and performance criteria associated with the recognised qualification standard” could be performed by simply concatenating a standard text string to the text of the assessable criteria, and that “there is no substantial effect or transformation in generating the questions by concatenating text matters”. Later, the Delegate referred to this as a “mere cut and paste”, which he did not regard as a substantive transformation of data.

The Delegate dismissed the independent system claim for “substantially defining a mere system variant for operating the method of claim 1”.

Finally, the Delegate indicated that he believed that the claims could be amended to include a manner of manufacture if more specific details of the data processing were required in the claims, such as generation of the questions based on identification of particular keywords within the assessable criteria and additional contextual information associated with the qualifications. Accordingly, the patentee was allowed 60 days to propose suitable amendments.

Commentary

This decision is another in a string of Patent Office decisions rejecting broad computer-implemented method and system claims for lacking a manner of manufacture based on discounting of the computer-related features for being incidental.

The decision also rejected data transformation steps, such as the automatic generation of the questions, for being insufficiently “substantive”. The Delegate may have found the transformation insufficient because it seemed to be too trivial (a “mere cut and paste”).

Patent applicants with computer-implemented inventions should be careful to include as much relevant and unique technical detail as practicably possible in their patent specifications to address the increasing requirements for manner of manufacture set out by the Australian Patent Office. Patent opponents, on the other hand, may take every opportunity to argue that “concrete” subject matter in a claim is insubstantial or peripheral to the purpose of the invention.

In this regard, however, we note that this decision may soon be clarified or overturned because RPL Central has appealed to the Federal Court.